governance, political economy, institutional development and economic regulation

Archive for the ‘CPI (M)’ Category

Former Prime Minister Manmohan Singh, recently released a book titled India Transformed — 25 years of Economic Reform, edited by Rakesh Mohan, at the appropriately historic Nehru Memorial Library. After the obligatory photo-op, Dr Singh turned to finance minister Arun Jaitley and with a beatific smile, handed the book over to him, as if, symbolically, he was satisfied that he could hand over trusteeship of the economy, to the three-year-old NDA government, and walked off, disregarding the speech he was scheduled to deliver.

The reform baton passes on

It was indeed a poignant moment and well chosen, for the economic baton to be handed over. The high-decibel criticism by Left-oriented, liberal public intellectuals of the economic vacuity of the BJP government’s economic policies continues. But the fact is that we are now at a cusp, an inflexion point. In all likelihood, we shall do substantially better on inclusive growth. This may sound incredulous at a time when growth, industrial investment and exports have fallen from the earlier upward looking trend line. But a dip in the industrial investment and growth rate are natural short-term consequences of the BJP having finally walked the talk on corruption.

Pressing the economic accelerator is not enough

Over the first three years, the NDA merely pressed the accelerator harder on the positive legacy of the UPA — rural unemployment support, fast-forwarding Aadhar, digitisation of commerce and banking, financial inclusion, space technology competitiveness, making electricity surplus, making access to telecommunications even more affordable, better transport and urban infrastructure, disinvestment of minority shares of state-owned entities, ensuring fiscal stability and progressively higher financial devolution to sub-national governments, including local governments.

Burying past negativities is good but not enough

It also did very well to bury the negative legacy of the UPA. The biggest achievement is in fast forwarding of expenditure programmes without the viral outbreak of corruption scandals seen earlier. More positively a three-pronged action plan is in place to make public systems resilient to corruption.

GST – the corruption buster

First, getting the GST is the biggest legislative and operational achievement to dampen corruption and enhance value addition by integrating the national market. Glitches remain due to poor drafting of rules which burden the small, honest taxpayer. Many such are the obsessive dedication to maximising revenue, even at the expense of simplicity. As usual the pain is being most felt by those least able to bear it — ragpickers — at the bottom of the urban food chain – their daily income have halved because the “kabadis” (junk yards) they sell plastics and glass to, are playing safe on the likely new tax liabilities. Small individual consultants or homeowners, who live in one state but get work or rent from another, re similarly caught in a bewildering tax reporting spaghetti.

Bankruptcy & NPA resolution – The crony capitalism killer app

Second, is the frontal attack on crony capitalism — identifying the borrowers who have defaulted on Rs 12 trillion owed to banks, getting the Bankruptcy Act operational and signaling public sector banks that there will be no more “Mundra scam (1950s)” type telephone calls from the government. Reaffirming that sensible lending shall be rewarded and inept or corrupt lending punished.

Big brother must watch use smart analytics

Third, the proposed use of “big data”, including data from social media, to zoom in on potential tax evasion and crime. Taken together, these actions lay the systemic capacity for reducing corruption.

Aim for the sweet spot

Whilst perfecting its drive at real sector reforms, here are the four “tests” the government must pass.

Defang the trade Unions

First, the unleashing of genuine privatisation (offloading of majority shares in a state-owned entity) as proposed in the long-delayed case of Air India is the winner. It sends the signal that India is open to efficiency enhancing financial restructuring. That it intends to free up existing public capital to create new public goods — jobs, physical infrastructure, improved social services, like health and education, whilst fresh private capital gets infused into the commercially viable supply of private goods — air and rail travel, steel, metals, petroleum and electricity. The Labour Unions are up in arms. This is where privatisation flagged in 2003 under Minister Arun Jaitley and Prime Minister A.B.Vajpayee. Can the Modi-Jaitley team de-fang the inward looking, protectionist, labour “aristocracy” comprising the Trade Unions – the bedrock of the moribund CPI(M)?

Grow private banking rapidly

Second, financial sector restructuring to make state-owned banks commercially viable. Uday Kotak, of the Kotak Mahindra Bank, surely over-stretches when he advocates the wholesale exit of loss making public banks and their substitution by private banks. But clearly, the strategy of incremental privatisation, as done earlier to enhance telecom, aviation or electricity generation, will pressure state-owned banks to become competitive. This should also circumscribe the ability of the government to use banks like ATMs for populist goodies.

Nail large. serial loan defaulters as criminals

Third, the strong action proposed for making collusive default on bank loans a criminal act is commendable. It brandishes a big stick for potential defaulters. The intention is virtuous. But experience shows that criminals, especially rich ones, find it easier to evade the law than poor innocents. To avoid this perverse outcome, criminal powers should not be delegated outside the judiciary. The record of tax tribunals and quasi-judicial agencies is not sanguine enough to empower them with criminal powers in addition to their economic mandates.

There is no option except to reform the judiciary through incentives and structural changes in judicial governance. This is a tough nut to crack, but shortcuts will give rise to the miscarriage of justice, vigilantism, and massive public resentment — specially in the middle class, which will be the most impacted in cases related to property and small business.

Remain a classic, fiscal fundamentalist

Lastly, the finance minister’s determination to maintain macro-economic stability has been amply demonstrated. This resolve must not weaken even during the run up to the 2019 general election. This will be the biggest economic win,lo if achieved. The report of the N.K. Singh Fiscal Responsibility and Budget Management Committee 2017 embeds too much flexibility to provide credible guidance for the future. Fiscal fundamentalism is better.

Good politics must also be good economics. There is an appetite now amongst voters for hard reform. This, by itself, is a tribute to the credibility of the NDA government. A populist pre-election budget would be seen by the voters as an early admission of defeat. That is not the winner’s way.

Adapted from the author’s article in The Asian Age, August 9, 2017 http://www.asianage.com/opinion/columnists/090817/hard-reforms-vital-nda-needs-to-shun-populism.html

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Scaling up is the name of the game in politics and in business. The BJP secured enviable gains in the early 2017 municipal elections in Maharashtra and Odisha. A win in the Goa state election is likely. A possible, albeit messy, near-win in Uttar Pradesh and potential inroads into Karnataka, Tamil Nadu and West Bengal portend that the Narendra Modi juggernaut is rolling out a massive, vertically integrated consolidation of party votes across the three levels of government.

Big, deep pockets business is in

In business, too, big is beautiful. Government banks and oil companies are being merged into competitively-sized entities. Reliance, India’s second biggest company by market capitalisation, after Tata Consultancy Services, still rankles at the loss of the top position due to faltering gas production. It is now hitting back at the fragmented competition in telecom, targeting an aggressive 50 per cent share by 2021.

Bigger publicly owned enterprises and bigger government is the inevitable option if private investment response is weak

The government sector too is expected to grow. Some of this is dictated by the compulsions of the faltering international economy. Private capital is risk averse when returns are dodgy. Public capital then is the only option. India is terribly under-capitalised in network and social infrastructure. We spend less than one half of what we should to get rid of the infrastructure constraints on growth and security. The government’s budget needs to expand by at least one-fourth to accommodate the necessary capital spend. FY 2017-18 is not budgeted to be different from the past. There is not enough time before the 2019 general election for grounding project plans into reality. Jobs will consequently be funded by public finance.

Citizen anxiety at being left out in the cold

Should citizens and consumers then be apprehensive about the drive to consolidate and grow across government and business? Not really. Dominance is a systemic outcome of competition. Institutional safeguards can ensure that dominance is not misused to dilute citizen and consumer interests. The scale of operations should be a matter of choice, not compulsion, or the outcome of regulatory nudges. Citizens should rather be concerned that decent jobs won’t come unless businesses and government grow to scales dictated by market parameters.

Multiparty politics only means larger ballot boxes

The political architecture is similarly fragmented. A loose law allows a mind-boggling 1,452 political parties to be “registered” by the Election Commission under the Representation of the People Act 1951. Only 54 parties are recognised at the state level and just six are national parties. Recognition has stricter norms linked to voter share and elected candidates. Believe it or not, the commission’s powers to de-register moribund parties are not explicit.

Multi-party politics has become a fetish, far beyond its usefulness to the average voter. Tightening up on representational norms is possible without diluting the basic freedom to choose one’s political party. Just gearing up the disclosure, internal governance and accounting requirements, to the levels required for companies, can reduce the number of registered parties.

Smart regulation can weed out frivolous parties

Enforcing regulatory compliance can deter frivolous registration and ensure responsible representation. This is illustrated by the experience of companies. Of the 16 million commercial entities operating in India, just one million are registered under the Companies Act 2013, despite the benefits which accrue from registration. It is not as if only large commercial entities choose to get registered. 66 per cent of companies are very small with an authorised share capital below Rs 1 million or just $15,000. But the widespread reluctance to register is because of the accompanying higher levels of disclosure required. Political parties would respond similarly. Only the most serious ones would remain registered if regulatory requirements were increased in the public interest.

Political consolidation as a public good.

Why should we think of political consolidation as a public good? Our fractured and divisive social architecture provides ready opportunities for exploitation of the cleavages for narrow political purposes. We must make it difficult for parties. which cater solely to narrow agendas. Social inclusion fundamentalists would rebel against any institutional constraint on the freedom of a political party to represent even marginal views. But look at the trade-offs. Caste and religion find no place, in our Constitution, as legitimate grounds for political mobilisation. Introducing institutional mechanisms which encourage broad-banding of political platforms is therefore legitimate.

Mandate rainbow nominations for inclusive politics

One way to ensure such broad-banding across castes and religions is to mandate that parties must replicate the prevailing rainbow of castes and religions while nominating candidates in specific jurisdictions. Savvy political parties are already doing so. The BJP broadened its appeal to dalit and backward caste voters in Uttar Pradesh (2017). A quarter of Bahujan Samaj Party candidates are Muslims to demonstrate Mayawati’s good faith while seeking Muslim support. The Samajwadi Party’s tieup with the Congress broadens its appeal to dalits and upper castes — both long-time supporters of the Congress.

In a fragmented political market, institutional compulsions to broaden the electoral base can be an effective catalyst for consolidation. This would be a welcome change from the minimalist strategy of securing the largest number of votes polled by splintering your opponent’s vote share below your own.

Leave room to grow

Limiting governmental and private sector dominance by constraining their ability to grow has negative social and economic outcomes. We barred Facebook from giving free access to a limited Internet space in 2016 due to the misplaced fear of deep pockets-driven future dominance. E-commerce — similarly driven by deep pockets — has somehow bucked the tendency to protect incumbents. Institutional reform to regulate big institutions is overdue. Smart laws and empowered regulators can sift destructive dominance from scaling up for efficiency enhancement. Bulking up is the international trend. We cannot but conform.

Haryana’s folk dances are vigorous and fiesty like its people. Photo credit:alchetron.com

Haryana wears its heart and mind on its sleeve. There is a lot of brawn and bravado but little guile here. Last week, the Haryana Assembly listened in rapt attention to a pravachan (teachings of a holy person) by a Jain monk. Alarm bells rang immediately in the citadels of prickly pseudo-secular vigilantism.

The Indian Constitution clubs Jains, Sikhs and Buddhists under the broader rubric of “Hindus”. So, the choice of a Jain monk, rather than a Hindu priest, to preach to the Assembly was a clever and far-reaching tactic to formalise the mix of religion with politics. Clever, because the minority Jain community is being used as a proxy for Hindu thought. Far reaching because, frankly, it was disturbing, coming from an overwhelmingly Hindu state, ruled by the BJP.

The politico-religious cocktail

In these fractious times, an overt mix of religion and politics is unusual. The practice has been to keep religion distanced from the formal processes of the State, whilst discreetly extracting political mileage from religious discord. Secular fundamentalists cavil that unless the strictest oversight is exercised, in this God-fearing, Hindu dominant country, religion can creep into politics and governance, to the detriment of marginalised communities. They have a point. In earlier days, prayers on public occasions were explicitly secular. Holy men from all major religions were allotted time for doing their bit. But this tradition has waned during the last two decades. Hindus no longer feel obliged to be subdued, lest they offend minorities. This is a healthy development. Truth needs to be spoken and recognised before reconciliation can happen. Paying lip service to secularism, whilst practising a more partisan strategy, has done little for those away from the mainstream.

1986 – Shah Bano – a Muslim, who had to fight a majority government, pandering to populist Islamic orthodoxy, for getting maintenance from a divorced husband, even after getting relief from a progressive judiciary.

India: a “benignly Hindu” majority state

The “syncretic” culture of India is predominantly Hindu. We are more comfortable with Barelvi Sufi version of Islam than the more strident Wahhabi Deobandi type. This illustrates that strident, ritualised religion — whether Hinduism, Islam, Christianity or Sikhism, does not align with the benign and neutral constitutional provisions. Citizenship, not religion, is the primary identity of Indians. This is the essence of a modern, secular state.

Haryana: Treading thorny paths

Haryana has initiated a novel experiment of democratising religion by inviting a never-before direct interaction between a religious leader and elected legislators. This has been long overdue. Legislators reflect voter preferences better than intellectuals. But their formal duties thrust them into an artificial bubble, which bars frank recognition of the extent to which religion both deeply divides and elevates India. Nothing wrong in puncturing the bubble. But the Haryana experiment will lack credibility as a “positive new beginning”, unless it promotes similar interaction with religious leaders of all denominations.

Religion can be inherently divisive, particularly in the highly-contested political environment of democracy. This is why Communist regimes stand out from other political parties, in that they steadfastly ignore religion. Harkishan Singh Surjeet, the wily politician and grand old man of the CPI(M), passed on in 2008. He was a Sikh. But at his funeral, there were no religious rituals beyond a spirited Lal Salaam. Contrast this with the traditional rituals which accompany the sendoff for other departed leaders.

The Indian “glue”: beyond religion?

The overlay, mostly incipient but often explicit, between religion and politics, has been a fact in the subcontinent since Independence. Pakistan hived itself off into an Islamic state consisting of physically and culturally separated West Pakistan and Bengali-speaking East Pakistan, now Bangladesh. Surely, the fact that Pakistan split subsequently, despite a common religion and that Nepal, despite being a predominantly Hindu state, holds its sovereignty dear, sufficiently illustrates that Hinduism is not the primary glue which binds India. India is predominantly Hindu. But significant political jurisdictions, where 32 per cent of our people live, are not. These states cannot ignore the salience of a plural polity. Nagaland and Mizoram are predominantly Christian; the Kashmir Valley is Muslim; Punjab is 60 per cent Sikh; 20 per cent of West Bengal, 18 per cent of Uttar Pradesh and 17 per cent of Bihar is Muslim; 19 per cent of Kerala is Muslim and 25 per cent is Christian; Goa is 26 per cent Christian.

Sanitize religion for inclusive democracy

Rather than hiding from religion as an identity, dealing with it upfront and sanitising it democratically, could have real value. The pseudo-secularist approach, driven by 1950s beliefs in modernity versus tradition as values, rather than processes, relies on insulating politics from religion as the right way to go. Nothing could be worse, if the ground realities do not reflect this belief.

Far from fading away, across the world, religion as an identity is fighting back. And this is true across all religions. The modern state needs to explicitly factor in the resilience of religion as a treasured personal belief. But just as surely, the State needs to enforce constitutional rights across all religions. In particular, the religious marginalisation of minorities, dalits, women and the lesbian, gay, bisexual and transgender community come to mind. The available constitutional safeguards need to override religious biases against these communities. Upfront, visible confirmation of this intent by the leadership would be transformative.

If Haryana has this resolve then bridging the gulf between politics and religion makes eminent sense. If the moral fiber of politicians can be strengthened by religion, without diluting their constitutional commitment to safeguard the marginalised, the benefits of religious teachings far outweigh the costs. After all pragmatic Haryana filters all actions through the “value for money” lens.

But it is a thin line the legislators walk between legitimising naked majoritarianism — Haryana is 95 per cent Hindu — and spring-cleaning their minds as they run through the full gamut of multi-faith religious discourses in the Assembly. The stout bamboo lath (stick) that the archetypal Haryanvi “tau” (great uncle) is caricatured to carry is as useful to balance on a tight wire as it is to subdue dissent. It all depends on the intent with which it is wielded.

Adapted from the authors article in Asian Asian August 30, 2016 http://www.asianage.com/columnists/jain-monk-house-unhealthy-precedent-052

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Populism, buttressed by dodgy economics, has become the fashion statement in politics. Last year, the Union government approved handsome “real” increases in government salary. There was little justification for doing so since the government salaries were already fully indexed to inflation and the largesse couldn’t have been justified as a reward for higher productivity.

The default justification was that more money in the hands of government employees would kick start a virtuous circle. Higher demand for goods and services would lead to expanded supply, more jobs and just possibly, more income for the rest of us.

AAP disrupts the cozy status quo in Delhi

This week, the Aam Aadmi Party government in Delhi, used similar tactics to grab eyeballs on Independence Day. Evoking the high moral stance of re-distribution of wealth and the economic principle of boosting demand as justification, the government declared massive increase in the minimum wage. In effect, it imposed a “living wage”, for workers in Delhi.

The impossible dream of “mandating” the end of poverty

The concept of a “living wage” — pegged significantly higher than the minimum wage — with an eye to decrease poverty has been used in over 100 urban jurisdictions in the United States since the late 1990s. It has also been used to set the national poverty level in India. But it is pegged at very low levels.

In Delhi, chief minister Arvind Kejriwal has proposed that the minimum wages of unskilled labour will be increased from Rs 9,500 to Rs 14,000, semi-skilled Rs 10,600 to Rs 15,500 and for skilled Rs 11,600 to Rs 17,000.

The hike seems unreasonable given that the minimum wage in Delhi is already 35 per cent higher than in neighbouring Uttar Pradesh and 72 per cent higher than in adjoining Haryana.

Delhi is rich but…

It is true that Delhi is relatively rich. Its per capita income of around Rs 18,300 per month is the highest among the states of India and the top 10 metros. Consequently, there is a case for setting the “living wage” in Delhi reasonably higher than in the neighbouring states, purely on the grounds of equity.

The real issue is whether a 47 per cent increase is warranted and how comprehensively should the “living wage” be applied? If it is applied just to the establishments governed by the Factories Act, then it is little more than populism. There are only around 8,000 such factories in land-hungry Delhi and employment in them is static.

If the intention is to enlarge the coverage of the “living/minimum wage” to all registered shops and establishments, which employ around 20 per cent (one million) of Delhi’s five million workers, then the economic consequences can be more substantial.

Mandated wages hurt business and make it shift out

Photo credit: blogs.ft.com

The negative impact will be felt in price-sensitive, low value-addition segments like clothing, food and household goods, where higher wages will hurt business profits. More importantly, will a similar “living wage” follow for the one million workers in the informal sector — household help in rich and middle class homes and in unlicensed small establishments? If so Delhi’s privileged elite and wannabes may have to look for a lifestyle change – let the ayah go and manage their own babies; cook for themselves or use an app to order in; make their own beds; wash and iron their own laundry and learn to use a vacuum cleaner. And what of the ubiquitous car drivers and guards who lounge around the front gate of Delhi homes? Will the well-off opt for Ola and Uber instead?

Poor enforcement can make mandated wage a sham

Mandated high minimum wages, far above the market rate, encounter three problems. First, enforcing payment of the mandated wages depends crucially on clean, clever and consistent regulation. In its absence, it encourages the petty but crippling, corruption of “inspector raj”. Enlarging the scope of inspector raj in Delhi, even as it is being diluted in Rajasthan and Telangana sends the wrong message to investment for increasing jobs and private sector growth in Delhi.

High wages result in loss of unskilled jobs

Second, studies from the US show that the benefits are not uniform across the entire spectrum of workers. On average, unskilled workers lose the most from a high minimum wage because employment declines even as a smaller number of workers, who remain employed, benefit from high wages. Mandated wages rarely benefit skilled workers. Governments tend to be conservative in fixing the differential for skills. Delhi provides only a premium of 21 per cent, or `80 per day between unskilled and skilled work. The market premium is already between 75 to 100 per cent. A mason gets twice the amount as his unskilled worker — often a woman, who does the manual work.

Third, pegging a price for labour far above the market rate increases the fiscal burden. This happens directly when government salaries are needlessly enhanced. But it also hits the government budget indirectly, when applied to the private sector. Higher the mandated wage for unskilled work the more attractive it becomes for migrants. With open borders, no control on migration and the Delhi government committed, rightly so, to provide a basic quality of life for all — free water, free medical care, free education, cheap electricity, improved toilets and paved roads — the resulting fiscal impact can be crippling.

Immigrants reduce the market price of unskilled labour

One way of ensuring that market wage rates remain aligned with mandated wages and are not beggared by competition from in-migration, is to licence city workers, as in China. But it is difficult to do this effectively in a governance environment of pervasive corruption. Licensing is a one way street to inefficiency and corruption. If government land cannot be protected from encroachment by the mafia, there is little hope of implementing an equitable worker licensing regime. Railway stations are a good example. Try getting a licensed coolie to carry your bags at the stipulated rates and you are more likely to miss your train.

Test the viability first in government contracts

The high salary of unskilled government workers already provides a wage floor. But the incremental numbers employed are limited. The trend, since 1990s when the government adopted the practices of “new pubic management”, has been to outsource non-core services i.e. cleaning, canteen, security and office support. Worker productivity clearly increases under private management. But there is insufficient evidence that the wages paid to them reflect this higher productivity. The apprehension is that the workers will suffer from price competition to get government contracts.

This is a perverse and unintended outcome. Tightly regulating the private contracts that are funded by the government can ensure that the mandated wages are passed through to workers. And contractors do not corner the wage increase. This is how the financial viability of the enhanced wage rates should be tested before imposing them.

But there is little point in cultivating a small, handsomely paid labour “aristocracy”, as the CPI(M) did, whilst throttling investment and employment.

Adapted from the author’s article in Asian Age August 19, 2016 http://www.asianage.com/columnists/how-viable-are-hiked-wage-rates-333

Yasmina Reza’s God of Carnage — playing in Mumbai and Delhi — makes us laugh at ourselves by stripping bare the self-serving hypocrisy underlying socially acceptable roles. Bleeding-heart Indian social liberals would do well to see themselves in the mirror via this play.

Admittedly, we humans must get beyond our basically brutish nature. But the first step to doing this is not to be in denial about the brute within us. Narendra Modi baiters are particularly delusional about themselves.

For them Mr Modi is forever damned because of the Gujarat riots in 2002 and because he refuses to atone at the altar of “secularism” that Indira Gandhi embedded in the Constitution in 1976 along with the subsidiary altar of “socialism”.

We have, since 1990, correctly turned a Nelson’s eye to the latter as has the rest of the world. But liberals fear that both the right (Rashtriya Swayamsevak Sangh, Bharatiya Janata Party) and the left (communists), are so committed to their own political “ideology” that they aim to substitute liberal democracy with state authoritarianism.

The left has made itself redundant in India, so the real threat to liberalism is from the Modi government. The examples used to illustrate the increasingly “heavy hand” of the state are the clamp down on NGOs — Teesta Setalvad and Greenpeace; the attempt by the executive to reclaim the power to appoint higher judiciary; and current administrative practices like the “gag order” by home minister Rajnath Singh on officials hobnobbing with the press.

Misuse of authority can only be assessed in two ways — either via the judicial process or via loss of public support, as happened resoundingly in 1977. Indira Gandhi was damned by the judicial process before being damned by the electorate post-Emergency.

In Mr Modi’s case, no adverse judicial outcome taints him. His significant popular mandate is likely to be re-endorsed in the Bihar state elections later this year. The Opposition has a majority in the Rajya Sabha and the judiciary remains generously tolerant towards public interest litigants. Both checks are working well. With respect to the “gag order”, post the RTI legislation, access to public information is institutionalised. Yes, news hounds can no longer get “breaking news” easily, but that is no great loss.

Second, when was India ever a social, liberal democracy? Mahatma Gandhi was a social liberal, like Jawaharlal Nehru and Muhammad Ali Jinnah, but the tactics he used show that the country was not. That is why he mobilised the majority via religious means — bhajans and kirtans.

By preferring Nehru as the de facto Congress leader to Jinnah (who was never much of a hard-core Muslim), the Mahatma bowed to his political assessment that the Hindu majority would not accept anyone except a co-religionist as their leader. This was good realpolitik and has been the broad political trend since Independence.

After Independence, none of the national parties — the Congress, the Janata Dal, leave alone the BJP — have ever had anyone other than a Hindu as their supreme political leader. The only recent exception is Sonia Gandhi of the Congress. But even her links into politics are exceptionally pucca, upper caste Hindu. The Communist Party of India (Marxist), which is meant to be areligious, has had only one non-Hindu — a Sikh, Harkishan Singh Surjeet — as its general secretary from 1992 to 2005.

Indians feel comfortable being led by those who are from their own social group. For national issues religion and caste are the bonding factors. For state level elections, caste is the major factor; at the village level it is sub-caste or clan. This is hardly a characteristic of a liberal democracy.

The liberal political elite do a great disservice by spinning the myth of a liberal India. A more honest assessment would be of India as a seething cauldron of competing social groups held in balance by quasi-colonial state power. Recognising oneself, as I said earlier, is the first step to reconciliation and reform.

In a democracy, numbers count. To protect itself, minorities either have to increase their numbers, as the Hispanics and blacks are doing in the US, or they have to stay below the radar while aligning broadly with the majority goals. The US, a land of immigrants, has no qualms about requiring everyone to be American — in language and in culture, such as it is. France is even less tolerant of cultural or linguistic deviance. In comparison, India adjusts to linguistic, religious and cultural diversity. But till the Hindu population is in a majority they shall dictate the music to be played, as they have done since 1947.

India has remained an “administered” democracy of the colonial style — the spirit is scarce but bells and whistles abound — albeit better administered than it was pre-Independence. Prime Minister Modi’s moves are merely a muscular rendition of what all directly elected Prime Ministers did prior to 1989. Thereafter, coalition governments diminished the stature of the Prime Minister, who, in terms of formal powers, is more powerful than the American President. Those who have been socialised only during the last two decades of “coalition dharma”, when listless governance was the norm, need not be alarmed at the vigorous use of the available constitutional powers.

Any real democracy merely reflects the norms and aspirations of the people. This is the central conundrum of the Arab Spring that ended up fanning radical Islam instead of modernising North Africa and West Asia.

Urban folks worry too much about the seeming frailty of Indian democracy. They also exaggerate the role played by the media, civil society and intelligentsia as the bulwarks against its demise. The real custodians of democracy are the enormous variety of vertically and horizontally arrayed social groups, each negotiating to safeguard its own special interests and societal norms. By their very presence they illustrate that there is a competitive market for political power in India. Unsurprisingly, as in any market, bargaining power in a democracy is with the majority. But every market has to be regulated to be efficient and equitable. That is what Parliament and the judiciary are expected to do in our system. If democracy ever dies, it is these two institutions which will be responsible, not the executive or the people of India.